The emergence of the Internet as a common communication medium has crystallized into reality the possibility of electronic (on-line) exchange of goods among buyers and sellers in various global electronic marketplaces. Traditionally, the trading or exchanging of goods is conducted through trading forums, such as classified advertisements, collectible shows, garage sales and flea markets, or through intermediaries, such as auction houses and local dealer shops. The traditional markets are inefficient for a number of reasons. First, their fragmented and regional nature presents economic obstacles for buyers and sellers in meeting, exchanging information and completing the transactions. Second, traditional markets offer a limited selection of goods. Third, they often have high transaction costs from intermediaries. Fourth, buyers and sellers in these markets lack a reliable and convenient way of setting prices for sales or purchases.
The ubiquity and low cost associated with the Internet have turned it into a convenient medium by which consumers can purchase a variety of goods and services. Typically, a customer selects various products or services from a seller over the Internet. Once the customer has finished shopping, he or she enters billing information such as name, address, and credit card number. After verification of credit, the seller ships the product or provides the service to the customer. Since buyers and sellers meet on-line, convenience is achieved cost-effectively using the unique attributes of the Internet to facilitate trading.
The anonymity of the Internet provides a relatively safe medium for unscrupulous organizations. Thus, while convenient, the Internet does not provide a clear and convenient mechanism to resolve after-purchase disputes. These disputes may range from minor complaints about the quality of the product or service, or may involve fraud and other illegal or unethical activities in connection with electronic commerce.
When consumers receive unsatisfactory goods or services, or are involved in a dispute with a vendor or entity, they typically must lodge complaints directly to the vendor by calling the vendor or filling out a complaint form and sending the form to the vendor. Correspondingly, when a customer rejects a valid bill or when the vendor does not receive timely payments, the vendor typically lodges a complaint against the customer in court or uses a repossession/debt collection service. However, the traditional court system is expensive to use and the system may deny justice to those who cannot afford the expense or those with claims too small to justify the expense. This process resolves disputes between two parties and does not inform other consumers about the complaints. Moreover, the current legal system is based on geographic jurisdiction and thus is not effective in dealing with cross-border transactions such as occur on the Internet.
A less confrontational option available to consumers is to file complaints with government and non-profit consumer organizations such as the Better Business Bureau (BBB). These organizations provide services that inform consumers about complaints lodged against an entity such as a company by compiling complaints filed against different companies and then allowing consumers to check the reputation of a particular subject by requesting a report listing the complaints lodged against the subject.
A solution disclosed in U.S. Pat. No. 5,895,450 provides a method and apparatus for handling complaints that allows complainants to lodge anonymous complaints against subjects, informs the subjects of the complaints, permits the subjects to respond to the complaints, encourages settlements of the complaints and holds the parties to the complaints accountable for their conduct while attempting to resolve the complaints. A central computer is programmed to receive complaints and responses, store the complaints and responses in individual data records, and negotiate settlements to the complaints. Once the disputes are resolved, the settlements or judgments are stored along with their respective complaints and responses in the data records. The central computer is also programmed to provide public access to the data records to permit viewing of the corresponding complaints, responses, and settlements for allowing other users to gauge the conduct of the subjects and to encourage the subjects to respond to the complaints in a timely and satisfactory manner. Moreover, the central computer is programmed to monitor and rate the conduct and performance of both the complainants and the subjects during the course of the disputes. The ratings can be used to affect the outcome of the disputes and for other purposes to hold the parties accountable for their conduct during the attempted resolution of the disputes to encourage good conduct and cooperation between the parties during the course of the disputes.
Other dispute resolution systems include Web sites that offer arbitration or mediation. The sites that provide online dispute resolution include sites from the National Arbitration Forum (http://www.arb-forum.com); Arbelest (http://arbelest.com); i-courthouse (http://www.i-courthouse.com). The National Arbitration Forum web site offers a set of resources traditionally available for arbitration on the Internet. Arbelest's web site provides a set of dispute resolution resources, including objective, real-time dispute resolution services, automated claim settlement, and a comprehensive online reference library. ICourthouse's site offers Panel Jury trials that allow the parties to present their case before a jury selected according to demographic information and the jurors' answers to questions. Other dispute resolution sites include CPA WebTrust and internetneutral (http://internetneutral.com); World Intellectual Property Organization (http://arbiter.wipo.int/arbitration); Clicknsettle (http://clicknsettle.com); Cybersettle (http://cybersettle.com); Cybertribunal (http://www.cybertribunal.org); Rent-a-court (http://rent-a-court.com); MIRC (onlinemediators.com); Safeonline (http://www.safeonline.com); Bid$afe (http://www.auctions.com/au/sharedcontent/bidsafe_info.asp); i-escrow (http://www.iescrow.com); tradeSafe (http://www.tradesafe.com); http://resolutionforum.org; http://ilevel.com; http://disputes.org; and http://ombuds.org